Public Procurement Practice
USE OF COOPERATIVE CONTRACTS
FOR PUBLIC PROCUREMENT
STANDARD
After conducting extensive due diligence and market research, public
procurement should, where permissible by law or regulation, consider
the use of cooperative contracts, in order to lower prices, lower
administrative costs, increase competition, and obtain more favorable
terms and conditions. When using cooperative contracts attention
should be given to ensuring legal compliance, open competition, and
effective/ efficient use of time and resources.
Definition
Cooperative Procurement is a term that refers to the combining of
requirements of two or more public procurement entities1 to leverage
the benefits of volume purchases, delivery and supply chain
advantages, best practices, and the reduction of administrative time
and expenses.
Piggyback (Piggyback Cooperatives) is a form of intergovernmental
cooperative purchasing in which an entity will be extended the same
pricing and terms of a contract entered into by another entity. Generally
the originating entity will competitively award a contract that will
include language allowing for other entities to utilize the contract, which
may be to their advantage in terms of pricing, thereby gaining
economies of scale that they would otherwise not receive if they
competed on their own.2
Element 1.1 Conducting Due Diligence
Prior to making the decision to use a cooperative contract, procurement should conduct
extensive due diligence by following this checklist:
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Compare the cooperative contracts available for the required product or service, conduct
market research, and evaluate whether the use of a cooperative contract is appropriate.
Analyze all costs associated with conducting a competitive solicitation.
Ensure that the use of the cooperative contract meets all competitive requirements.
Review the cooperative contract for conformance with all applicable laws and best practices.
Analyze the product or service specifications, price, terms and conditions and other factors
such as: cost to utilize the contract, shipping, minimum spend requirements, and availability
of contract documentation, to ensure that the cooperative contract produces best value.
Ensure that the organization/ local required terms and conditions are incorporated into
the contract.
Incorporate or remove3 additional terms and conditions by developing an addendum or
purchase order4 that is signed by both procurement and the supplier.
Contact the cooperative lead government agency to verify contract application and eligibility
Use of Cooperative Contracts
Cooperative procurement efforts may result in contracts that other
entities may “piggyback”.
Public Procurement Practice
USE OF COOPERATIVE CONTRACTS
FOR PUBLIC PROCUREMENT (Cont’d)
Element 1.2 Obtain the Necessary Contract Documents for File
Documents in the cooperative contract file should include:
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Solicitation
The bid tabulation or evaluation with the reason for award
A copy of the winning proposal/ bid
A copy of all insurance/ bond certificates required by the contract
Element 1.3 Cooperative Contract Administration
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Keep the lead agency informed of any problems with the supplier.
Keep the lead agency informed of any specification adherence problems, issues, etc.
Resist any tendency to bargain against the contract’s fixed pricing.
When pricing is established under the cooperative contract, ensure that invoices match
the contract prices.
Background
It is a best practice to consider the use of cooperative procurement
contracts, on a case-by-case basis, and only after proper due diligence
has been performed. Cooperative procurement contracts are usually
based on the combined requirements of multiple organizations.5
Government entities can save time and money, obtain higher quality
products and services, and standardize products and services by using
cooperative contracts.
Use of Cooperative Contracts
Not all jurisdictions allow participation in cooperative contracts, either
as a user or as a lead. Some jurisdictions restrict or regulate the scope
of cooperatives.6 It is up to the procurement professional to seek
guidance to ensure that compliance with all applicable laws are met.7
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Generally, the “entity” issuing and awarding the solicitation must meet the definition of a political subdivision. The entity must meet the
legal requirements to piggyback.
NIGP. (2010). Public procurement dictionary of terms. Herndon, VA: NIGP.
If the procurement professional finds it necessary to add or remove a large amount of terms and conditions, they should carefully consider
whether or not the use of the cooperative contract is appropriate.
Terms and conditions that are not present may be added to your purchase order issued pursuant to the cooperative procurement contract.
However, use of a purchase order is a unilateral action. Procurement professionals should evaluate the frequency of use/ purchase to
determine whether or not to use a purchase order. If the frequency of use/ purchase is high, then an addendum should be used instead of a
purchase order.
Adapted from NASPO. (2006). Strength in numbers: An introduction to cooperative procurements. Retrieved from
http://www.naspo.org/documents/Cooperative_Purchasing0410update.pdf
Ibid.
U.S. Communities found at uscommunities.org Participation in a cooperative purchasing agreement does not exempt a procurement entity
from compliance with local laws or policies, whether as the sponsoring agency or a participant in the agreement A list of statutes that
individual states in the U.S, use for cooperative purchasing can be found at: http://www.uscommunities.org/purchasing-resources/statestatutes.aspx
© 2012 CIPS and NIGP